Significant developments are taking place this week at the island’s two largest, systemic banks. Specifically, the board of directors of the Bank of Cyprus is meeting today to review and announce the results for the first half of 2019.
This will be the last meeting for outgoing Irish CEO John Hourican who has been replaced by Panicos Nicolaou.
At the same time, Hellenic Bank’s shareholders will nominate their new 13-member board at an extraordinary general meeting on Wednesday.
There is an expectation within the Bank of Cyprus that with the change of management which is falling in the hands of a Cypriot banker, the model of operation will also change in certain ways. One of the major issues the new CEO will have to tackle is the need for labour costs to be reduced.
Various scenarios regarding a compensation formula for those employees who will opt to leave by the end of the year are already making the rounds. Nothing is official but end of the year is the time when the Bank is expected to provide incentives for early retirement.
On Wednesday, the battle for more positions on Hellenic group’s new board of directors will take place between Demetra Investment and Wargaming.
However, the first clear indications of the alliances to emerge among the Bank’s many shareholders will also be made clear, as well as the strategy to be adopted so that the lender successfully tackles prevailing challenges.
Both of the island’s big banks are confronted with similar challenges. Beyond that of over-staffing and the need for digital transformation, non-performing loans have to also be further reduced.
Negotiations with investment funds for the acquisition of additional red load have already begun by both banks.